Auckland startup Spoke Phone raises $11m for its disruptive internet calling software

Kieron Lawson (L) and Jason Kerr have just landed a massive investment. Photo / Dean Purcell

Auckland startup Spoke Phone has just closed a $7 million funding round. Along with seed funding, the company has now raised $11m for its internet-calling software.

Chief executive and co-founder Jason Kerr says his company's Spoke Phone app works with a cloud-based system to give every mobile in your company the sort of business features that previously required an expensive switchboard in your office, such as group calls, transfers, auto-attendant and voicemail-to-text.

Of course, technology for making voice calls over the internet, and adding various business frills, is a dime-a-dozen in 2020. Or make that many, many dozens. Kerr counts no less than 5640 business phone providers offering a VoIP (Voice over Internet Protocol or internet calling) solution.

But Kerr says Spoke Phone's solution is the only one that's mobile-first; designed for mobile phones only, albeit with some option to smooth the pillow for the dying deskphone (more on the pros and cons of that setup shortly).

The $7m Series A round was led by Australian venture capital firm Marbruck Investments, with support from New Zealand-based Icehouse Ventures and Sir Stephen Tindall's K1W1 fund (which chipped in towards Icehouse Ventures's share under the pair's co-investing deal).

Marbruck (29 per cent) and Icehouse Ventures (28 per cent) are the two largest shareholders post raise. Marbruck is a newcomer. Icehouse Ventures also invested in the seed round.

Marbruck is part of the broader Aussie incursion that has seen the likes of AirTree, Blackbird and SquarePeg filling the local venture capital void (the government has also been elbowing the SuperFund to chip in locally).

Kerr has an 18 per cent holding and co-founder and chief technology officer Kieron Lawson 14 per cent.

Spoke Phone was founded three years ago. The first two years were spent developing its product, and the past 12 months selling it online and via partners including Tindall's Warehouse Stationery. Early customers include Netball New Zealand, Dymocks Australia and Raymond James Financial Services in the US.

Kerr and Lawson's products costs from $19 per employee per month.

But why plump for any calling app in this era when Vodafone, Spark and 2degrees (and their equivalents in other countries) throw in unlimited calls and texts with most contract plans, meaning most of us are essentially only paying for mobile these days?

Kerr readily concedes that if you're a one or two-person business, then you probably don't need his company's product. If you do go with a calling app, it could be a freebie from the likes of Facebook, Google or Skype.

But for others, Kerr says "Spoke Phone is an app for your mobile phone, giving your mobile phone a second line. Personal calls and business calls are now separated, employee mobile phone numbers are hidden from customers, and calls and voicemail stay secure on the company network."

Few companies are mobile-only, even if cellphones have become so pervasive.

But Kerr says Spoke Phone is designed to sit on top of whatever digital system you've got wrangling your company's deskphones. Install the Spoke Phone app on everyone's mobile and you're good to go.

A $19 per user per month version is aimed at small businesses.

A mid-range version is about to be launched aimed at companies with legacy phone systems, which Kerr expects will cost in the region of $29 to $35 per user per month.

And for the top end of town, there's a $140 per user per month version aimed at banking and financial institutions. Kerr says the Australian Royal Commision into Misconduct in Banking and other controversies have raised awareness that mobile phones often fall out of the compliance loop - especially when calls are forwarded to a cell. The high-end version of Spoke Phone means calls forwarded to a mobile can be encrypted, and that calls can be auto-transcripted then the transcription sucked into a customer relationship management system, which in turn can alert for key words that indicate if a customer is, say, confused or disgruntled.

An actual serial entrepreneur

Kerr, now 52, has been proved something of a dab hand at startups and multimillion-dollar exits.

The one-time Ansett NZ flight operations manager developed and patented a device-independent txting technology when just 21, which he and three collaborators sold to US BellSouth (now part of AT&T for around US$2m.

He went on to create the world's first PC-based airline management software, to compete against the much more expensive Saber, before selling it to Accenture in 2005 before creating his biggest hit, recruitment software company Findly, which grew to around 500 staff worldwide before being sold to multinational Symphony.

Lawson also has some good startup form. He was chief software architect at Exonet - the original cloud accounting software company, sold to MYOB, and was chief technology officer at contact management software outfit Datasquirt before it was sold to US company LiveOps for US$12.5m in 2011. He then landed at Kerr's Findly - where the pair stayed under Symphony's ownership until 2016.

Where the money's going

With Spoke Phone's $7m cash injection, Kerr and Lawson plan to boost staff numbers from 18 to 35, with software engineers added in Auckland and a sales office due to be opened in the US later this year.